Memory shortages could push PC shipments to pre-pandemic low

The PC industry is facing a memory supply crisis that threatens to undo the market's recent recovery. According to IDC research manager Jitesh Ubrani, shortages affecting DRAM, NAND, and even hard drives will persist through late 2027, driving sustained price increases and forcing vendors to ship devices with compromised specifications.

The Memory Crunch Timeline

What started as a temporary supply hiccup has evolved into a structural shortage. "We had assumed this would be primarily a 2026 story. More and more, particularly at CES, we had conversations with folks and they're saying 'You won't find price stability in memory up until maybe late 2027,'" Ubrani explained. The key distinction is that 2027 represents price stabilization, not price reduction.

This extends beyond typical market cycles. Dell's COO Jeff Clarke, who took over the company's PC division in 2025, identified this as the seventh DRAM shortage in his 40-year career, but emphasized its unprecedented nature. "We have not seen costs move at the rate that we've seen. And by the way, it's not unique to DRAM. It's NAND. It is hard drives, leading edge nodes across the semiconductor network," Clarke told analysts during Dell's November earnings call.

Market Impact: From Recovery to Recession

The timing is particularly cruel. 2025 was a breakout year for PC shipments, which grew 8.1% to 284.7 million units, driven by Windows 10 end-of-support and product refreshes. Q4 alone saw 76.4 million devices shipped, up 9.6% year-over-year.

However, Ubrani revealed this surge contained a hidden vulnerability: "part of that success comes from suppliers stockpiling inventory ahead of a looming memory shortage." This artificial demand pull-forward means 2025 may represent "the last good year we have for the next two years, or maybe even three years."

The projections are stark:

• Baseline 2026 forecast: 2.4% decline (278 million units)
• Moderate downside: 4.9% decline (271 million units)
• Memory shortage scenario: 9% decline (260 million units)

At 260 million units, the market would return to 2016 volumes and match 2023's performance, which Ubrani notes was "one of the worst years in PC history" due to post-pandemic inventory gluts.

The AI PC Compromise

The shortage is fundamentally changing how vendors define and market AI PCs. Previously, 16GB RAM was considered the baseline for true AI PCs. With memory constraints, vendors are pivoting to hybrid cloud-device architectures.

"You might see instances where a system doesn't have 16 gigs and they're still promoted as an AI PC, but it would use this hybrid AI approach, where you can do some on device, but most of it in cloud," Ubrani said. Enterprise marketing will shift away from "on-device AI" promises, though consumer messaging may remain ambiguous.

This represents a significant technical compromise. Local AI processing requires substantial memory for model weights and inference. Cloud offloading reduces local memory needs but introduces latency, connectivity dependencies, and privacy concerns.

Vendor Strategies and Vulnerabilities

Major OEMs are positioning themselves for the crunch:

Dell acknowledged higher costs are inevitable. Jeff Clarke's seventh shortage experience provides institutional knowledge, but scale only offers partial protection against systemic shortages.

HP CEO Enrique Lores warned that if memory markets don't improve, expect price increases in H2 2026.

Lenovo and Apple benefit from massive purchasing power and long-term supplier relationships. However, even these giants have signaled price hikes.

Smaller vendors face existential threats. Ubrani identified Acer, Asus, and MSI as most vulnerable: "Even if they do get the memory, their prices are going to be so high that their finished PCs are going to be so expensive that their customers won't buy it."

Root Causes: AI Infrastructure Demand

The shortage stems from competing demands across the technology stack:

1. AI Data Centers: Massive GPU deployments require enormous amounts of high-bandwidth memory (HBM), consuming DRAM production capacity
2. Enterprise AI PCs: New demand for local inference hardware
3. Consumer devices: Continued smartphone and tablet memory requirements
4. Automotive and IoT: Growing embedded memory needs

Semiconductor foundries are at capacity across leading-edge nodes, and memory manufacturers cannot rapidly scale production. Building new fabs takes years and billions of dollars.

What This Means for Buyers

2026-2027 Purchasing Reality:

• Expect 10-20% price increases on comparable configurations
• Entry-level systems will ship with less memory than previous generations
• "AI PC" marketing will increasingly rely on cloud processing
• Premium configurations will become significantly more expensive
• Upgrade paths may be limited as memory prices remain high

Strategic Considerations:

• Organizations should accelerate refresh cycles to secure current pricing
• Consider memory as a primary differentiator when comparing quotes
• Evaluate cloud vs. local AI processing trade-offs carefully
• Smaller businesses may find competitive quotes harder to obtain

Industry-Wide Ripple Effects

This shortage extends beyond PCs. The same memory types feed into:

• Graphics cards: Already experiencing extreme pricing
• Smartphones: Flagship devices may increase base prices
• Embedded systems: Industrial and automotive sectors
• Storage: SSD prices will follow NAND trends

The semiconductor industry's cyclical nature means this shortage will eventually resolve, but the 18-24 month timeline represents significant market disruption. Vendors who navigated the pandemic supply chain chaos have playbook experience, but systemic memory shortages require different strategies.

The PC market's 2025 recovery may prove to be a temporary high point before a prolonged period of constrained supply and elevated pricing that fundamentally reshapes product strategies across the industry.